Mobile banking becomes fastest growing payment channel
It is because of telecom explosion that opened new concepts of business expansion especially in the financial sector as today the fastest growing payment channel in the country is Mobile Banking. According to official sources the number of transactions increased by 170.7% compared with that in the same period last year. Presently, there are around 1.5 million registered users of Mobile Banking in the country.
Mohammad Asif Arif, Commissioner Securities & Exchange Commission of Pakistan (SECP) while appreciating the role of telecom sector in the development of the economy revealed in an interview that recently a mobile service provider company offered life insurance cover to its consumers having a minimum load of Rs200 per day to their mobile phone. The results were unimaginable as the company got registered at least 8.4 lakh of customers in a short period of 4 months. The technology support made such a huge impact on business growth in insurance sector is just an example of productive utilization of the technology to expand business outreach. The insurance sector in particular was unable to tape the rural population because of the limited distribution network, now they are using mobile phone as an effective marketing tool which has done a magic in business growth.
The telecom sector has done wonders in the financial sector as according to State Bank of Pakistan the volume of e-banking transactions has grown considerably over the years. The number of online branches is 10,596, which accounts for around 95% of the total bank branches in the country; around 24.5 million transactions amounting to Rs7.48 trillion were performed via this channel during October-December of FY13-14. As on 31st December 2013, there is around 18.3 Point of Sale (POS) machines for every 100,000 people in the country.
During the quarter October-December, 2013, the Volume and Value of overall e-Banking transactions grew by 5.1% and 8.7% respectively to the last quarter and by 22.7% and 10% when compared with the same period of the last year. Further, in the composition of total e-Banking transactions, ATM has the highest share of 63.3% in Volume and 7.6% share in Value of transactions. Real Time Online Banking (RTOB) has the highest share of 89.9% in Value with 25.2% share in Volume of transactions. The remaining portion of transactions in terms of volume is captured by Point of Sale (5.9%), Internet (4%), Call Center (0.2%) and Mobile Banking (1.5%) respectively.
The number of transactions through ATMs reached over 61.7 million in the second quarter of FY13-14. The number of ATMs in the country has reached 7,684 for the quarter ended December, 2013, showing an increase of 10.2% from previous quarter. As on 31st December 2013, for every 100,000 people, there are 4.2 ATMs in the country and during that same period, Rs635 billion was transacted using this channel.
Further, as on end of December 2013, 24 banks are offering Internet Banking services that constitute a Volume share of 4% of total e-Banking transactions. During the quarter under review, 3.9 million transactions amounting to over Rs161 billion were conducted by 1.37 million registered users on Internet Banking. This showed a growth of 5.7% in Volume and 2.7% in Value of transactions compared to the previous quarter. While the e-Banking transaction including on line banking, ATMs and Mobile Banking taking strides, the number of plastic cards seems on decline.
The State Bank of Pakistan has released the Payment Systems Review for the quarter ended October-December, 2013. The report aims to review recent developments in the area of Large and Retail Value Payment Systems in Pakistan. During the quarter under review, Pakistan Real-Time Interbank Settlement Mechanism (PRISM), the Large Value Payment System of the country processed 141,667 payments worth over Rs35 trillion. This showed an increase of 8.2% and 15% in Volume and Value respectively compared to the previous quarter.
The number of Plastic Cards (Debit, Credit and ATM Only Cards) reached 22.38 million showing a decline of 4.2% compared with that in the previous quarter. The Credit cards showed a significant drop of 11.4% compared to the last quarter. In contribution of Plastic Cards, Debit Cards have the highest share of 89.6%.
All-time high revenue generation
Telecom sector revenues generated by Telecom operators in Pakistan in a single fiscal year reached all-time high at Rs445.7 billion during 2012-13, said Pakistan Telecommunication Authority’s annual report on telecom industry. The revenues of telecom operators grew by 8.9 percent during 2012-13 and reached Rs445.7 billion, up from Rs409.2 billion during same duration previous year.
The increasing revenues from the telecom sector indicate the strength of the telecom sector, which is vibrant and a going concern despite the economic difficulties and tough competition, especially in the cellular sector. The revenue generation are expected to take a quantum jump with the introduction of 3G & 4G technology, which is bound to add new business opportunities in Pakistan.